The steelmaker is embroiled in the early days of disclosing it falsified steel manufacturing data for a vast range of products, and nuclear power plants were among its customers

The global nuclear industry developed over the past fifty years dependent upon vast quantities of steel components supplied by a relatively small number of specialized manufacturers. One of them is Kobe Steel Ltd.

The steelmaker, a pillar of corporate Japan, is embroiled in the early days of disclosure of falsification of steel manufacturing data that extends to products used in planes and trains, to motor vehicles and spacecraft. And nuclear power plants.

Kobe Steel and its broad collection of subsidiaries have supplied products to the nuclear industry both in Japan and around the world since the 1960’s.

It’s a fair bet that every one of the 60 nuclear reactors operated in Japan since 1966 had some component supplied by Kobe Steel.

(Please click here for a report showing the Kobe Steel Group’s supply chain to the nuclear power industry.)

Steel is used in the nuclear reactor core, lining and pressure vessel, cooling systems, steam generators and condensers, thousands of meters of pipe work and prestressed steel concrete containment tendons.

Obviously, because of the public health risk from radiation leaks, the steel was supposedly manufactured to specific, high standards.

A man walks past the signboard of Kobe Steel at the group’s Tokyo headquarters in Tokyo, October 10, 2017. REUTERS/Issei Kato

Over the decades, a trickle of stories have appeared in the media disclosing that the steel supplied to nuclear plants did not quite match up to standards claimed by the industry.

On occasion there were accidents that were linked to faulty manufacturing and inspection (or no inspection).

In 2004 in the Mihama-3 reactor in western Japan a major pipe failure in the steam condensate system killed five workers. The pipe work had not been inspected since it was installed 28 years earlier.

The brewing Kobe Steel scandal has introduced the world to the Japanese term tokusai, which translates as shipping products that did not meet customer specifications.

The brewing Kobe Steel scandal has introduced the world to the Japanese term tokusai, which translates as shipping products that did not meet customer specifications.

Apparently, this practise of tokusai had become so institutionalized over decades at Kobe Steel companies that it became “essentially a tacit fraud manual,” according to the Nikkei business newspaper.

Of course, faulty parts in a car, train or aircraft could have severe consequences on safety, so for good reason Toyota Motor, Japan Railways, Boeing and the other 500 major customers of Kobe Steel are reviewing the steel they received.

Even if there are no major safety issues, they are likely to replace those parts. That will not be the approach of the nuclear industry.

The components we are talking about inside Japan’s nuclear reactors include steel and copper pipework that guarantees the cooling of the reactor core, including in emergencies.

Failure or rupture of these components could cause a severe accident and lead to a reactor meltdown.

It has been disclosed that Shinko Metal Products (owned by Kobe Steel) supplied tubing for Tokyo Electric Power Co.’s Fukushima Daini nuclear plant that failed had not gone through the correct quality inspection. (Note: the Fukushima Daini facility is the sister plant to Fukushima Daichi that suffered three reactor meltdowns in the March 2011 earthquake and tsunami in Japan.)

As a result, Japan’s Nuclear Regulation Authority (NRA) and Ministry of Economy Trade and Industry has jumped into action – sort of.

Nuclear power companies across the nation were asked to provide details of Kobe Steel products supplied to their reactors within two weeks, and a meeting will take place 9th November between the NRA and the nuclear industry.

Kobe Steel production also extends to joint ventures with Areva of France for the global supply of casks to contain nuclear spent fuel (they have the contract for Tokyo Electric’s destroyed Fukushima Daiichi plant), as well as the nuclear fuel industry.

This steel supply includes the Rokkasho-mura plutonium reprocessing plant in Aomori prefecture, in northern Japan.

Just this month, the Rokkasho plant’s owner, Japan Nuclear Fuel Ltd. (JNFL), admitted that it had violated safety rules at its site by fabricating records to say safety checks had been carried out when in reality none had been conducted since construction was completed over a decade ago.

On October 26th it was announced by JNFL that machine parts for its large uranium enrichment plant at Rokkasho had not been correctly inspected by the supplier – Kobe Steel.

We have been here before.

French reactor steel scandal

In 2015 it was disclosed that major components in reactor steam generators manufactured by Areva’s le Creusot plant were under investigation by the French regulator due to evidence of below specification toughness caused by high carbon content in the forged steel.

Initially downplayed by the national regulator and Areva, critics continued to push for a more stringent investigation.

Workers at the forge of Le Creusot, which makes giant iron castings primarily for the nuclear industry. Photo: AFP

In September 2015, the release of an independent evaluation conducted by Large and Associates – a UK-based engineering firm – at the request of Greenpeace really blew the doors open.

“The nature of the flaw in the steel, an excess of carbon, reduces steel toughness and renders the components vulnerable to fast fracture,” said the report’s author, John Large.

Further investigations extended to steam generator parts supplied by Japan Casting and Forging Company (JCFC) and Japan Steel Works (JSW) and installed in thirteen French nuclear reactors.

Centering in particular on JCFC supply, where failure to meet regulatory requirements even exceeded those at the Areva plant, 12 reactors in France with JCFC steel components in the steam generators were ordered shut down for physical inspections.

The regulator was not willing to rely only on manufacturing records from the French steel supplier to demonstrate safety. Not least because those records showed multiple cases of data manipulation and fraud.

The regulator was not willing to rely only on manufacturing records from the French steel supplier to demonstrate safety. Not least because those records showed multiple cases of data manipulation and fraud.

While those criminal investigations are working their way through the courts in Paris, Areva, the owner of the le Creusot steel plant, is ploughing through millions of pages of production documentation stretching back fifty years.

Hundreds of staff have been employed to review the data and it’s practically guaranteed they will find multiple examples of falsification and safety violations.

Meanwhile in Japan, the parallel investigation overseen by a handful of technicians at the NRA lasted a matter of weeks.

The Japanese utilities were ordered to supply a list of the suppliers of steam generator and pressure vessel components.

JSW, JCFC and JFE Holdings (which also has joint ventures with Kobe Steel) provided brief explanations as to why their components could not have the same reduced toughness as the very same components supplied to France.

Despite clear evidence of flaws in the steel forging process of JCFC, JSW and JFE, the NRA accepted their assurances and that was that.

No explanation as to how products that were below specification passed certification and were shipped from Japan to France, no review of the raw data and certainly no physical inspections at Japanese reactors.

The supply chain of the Japanese and global nuclear industry has many opaque tentacles, but they all lead back to a relatively few large companies. The nuclear industry operates in a global atomic supermarket with weak or non-existent regulatory oversight.

The five reactors now permitted to operate in Japan all have components supplied by one or more of these companies, as do reactors scheduled to resume operation in the next six months.

If we are to avoid a repetition of the carbon steel scandal in France, the NRA will have to decide that this is so serious that business as usual is not an option.

There is however no prospect of this. The NRA has neither the will nor the human resources or skill set to thoroughly investigate the supply chain of Kobe Steel – even if it were possible.

The chances that detailed production data for components installed in reactors in the 1970’s and 1980’s even exist or can be relied upon are near zero.

Instead the NRA will rely on the customers to provide lists of components and for Kobe Steel to provide analysis that the products are safe.

Unlike the aviation and car industries, which are likely to replace the suspect Kobe Steel components, the nuclear industry will decide that it’s not in their interests to provide credible assurance of safety to the public by replacement.

Further, whereas replacing suspension springs in a car or landing gear on an aircraft is relatively easy, no such option exists for nuclear reactors.

Many of the tens of thousands of components supplied by Kobe Steel are embedded deep in the heart of the nuclear reactors, even inspecting them is challenging and in some cases impossible.

Many of the tens of thousands of components supplied by Kobe Steel are embedded deep in the heart of the reactors, even inspecting them is challenging and in some cases impossible.

Dismantling the nuclear reactors to get access would effectively terminate the plant given the scale of the undertaking and costs involved.

While the blame for this latest scandal lies at Kobe Steel, the root causes of poor production standards and oversight within the nuclear industry are to be found within the utilities themselves and the national regulators.

Complacency over standards and disregard for safety, endemic since this birth of the industry, have not evaporated as a result of nuclear disasters such as Chernobyl or Fukushima.

If anything the industry is more entrenched in its ways than ever before, not least because it is fighting for its very survival.

Regulators, under political pressure to bend to industry demands, and equally complicit in decades of applying weak and inadequate oversight while looking the other way, are rarely interested to probe too deeply, no doubt wishing to avoid confirming what they suspect or know already.

The Kobe Steel scandal is an enormous blow to the embattled reputation of corporate Japan with justified calls for fundamental reform. But it could be a lot worse with not just car and aircraft passengers at risk, but entire regions of Japan under the increased threat of nuclear reactor accident.

Not to mention the hazards from reactors worldwide using potentially suspect Kobe Steel components.

The supply chain of the Japanese and global nuclear industry has many opaque tentacles, but they all lead back to a relatively few large companies. The nuclear industry operates in global atomic supermarket with weak or non-existent regulatory oversight.

Opening up the industry to robust and transparent investigation would threaten to completely derail the already slim prospects of Japanese government plans to restart more nuclear power plants and further damage the embattled nuclear power industry globally.

The industry and regulators will do all they can to prevent that from happening. The only practical and safe alternative solution is for a Japanese zero nuclear policy and a rapid transition to renewables.

Shaun Burnie, sburnie@greenpeace.org is a senior nuclear specialist, Greenpeace Germany. In 2015-2016 he coordinated investigations into steel manufacturing failures at le Creusot, JCFC and JSW in Japan, and has worked on Japanese nuclear policy for nearly thirty years.